Sportech tangles with the taxman

The UK listed gambling group Sportech plc has issued a public statement advising that its Value Added Tax claim against the British tax authorities in respect of Spot the Ball, has been heard at the First Tier Tax Tribunal.

The hearing commenced on Monday 8 October 2012 and closed yesterday, Wednesday 10 October 2012.

The VAT claim is for a repayment of VAT in excess of GBP 40 million, which could exceed GBP 80 million with simple interest applied.

The issue dates back to 2010, when Sportech’s application for repayment of erroneously levied VAT was rejected by HM Revenue and Customs.

Sportech claimed that its popular Spot the Ball initiative, in which punters try to place the ball missing from a football action photo, is a game of chance which should not be subject to VAT.

If that proposition is supported, then the tax from a 17-year period between 1979 and 1996 was paid in error, and HM Revenue and Customs should repay the VAT plus simple interest.

Sportech has been advised that it should expect to be notified of the Tribunal’s decision by the end of January 2013.